In June 2002, Congress authorized the Public Health Security and Bioterrorism Preparedness and Response Act of 2002. The Act granted the sum of almost $1.6 billion for the purpose of enhancing Federal, State, territorial, and local efforts to prepare and respond to the threat of bioterrorism, acute outbreaks of infectious disease, and other public health emergencies. This report presents the strategies that the public health sector has undertaken to equip itself with new competencies against the threat of bioterrorism. The authors interviewed State and local public health officials with direct knowledge of the funding patterns, budgets, and program strategies involved in the fiscal year 2002 Federal bioterrorism preparedness initiative. Eight State officials and 34 local health officials took part in the study. The report begins with a history of public health in the United States, and notes that the diverse organizational structures and funding strategies for managing public health responsibilities have contributed to the fragmented public health systems in the Nation today. The third chapter of the report discusses biodefense funding, looking at where it has gone, and how it has been spent. It examines how the Federal funds were allocated to States, territories, and certain local entities. It also examines how the States determined which agencies were to receive funding, how much local funding was to be awarded, and how the States released funds and ensured accountability of expenditures. This chapter also discusses the climate of fiscal uncertainty currently facing States, and how this situation has affected regular spending for public health as well as additional funding for bioterrorism preparedness. The authors found that many officials perceive bioterrorism preparedness as bringing fresh attention to public health and giving it an expanded sense of value within the community. The officials interviewed noted the following successes: improved preparedness levels, improved intra-agency cohesion, improved visibility and credibility for agencies within their communities, improved relationships between State and local public health officials, and improved public health systems. The fourth chapter of the report discusses the consistent themes that emerged from the study. These include: robust biodefense capabilities will require sustained investment in public health; public health needs improved understanding of bioterrorist threats and responses; threats to security demand consistency of core competencies at all levels of government; and protecting the Nation’s investment is of critical importance. The author concludes that improving the public health system’s ability to respond to health emergencies is one of the most important investments the country can make. Figures, notes, and appendix containing the study questionnaire